Binance to Buy FTX in Megadeal of Crypto Exchanges

Apart from Mr. Zhao, FTX was backed by a raft of other major investors, including Sequoia Capital, Lightspeed Venture Partners and SoftBank. FTX had raised nearly $2 billion in funding, according to PitchBook, which tracks private capital. Three investors in FTX described being shellshocked by the Binance takeover and what it portended for cryptocurrency start-ups.

Mr. Bankman-Fried emailed investors at 11 a.m. Pacific time to share news of the deal, according to a copy of the letter obtained by The Times. In it, he wrote that FTX’s shareholders were the company’s “second priority” and that he was more focused on the first priority of protecting customers and “the industry.”

“I’m sorry I didn’t do better,” he concluded. The letter was reported earlier by the newsletter Newcomer.

The deal strengthens the hand of Binance, which operates largely outside the United States but without a central headquarters. Binance built its business by offering a wide array of cryptocurrencies on its platform, as well as risky trading options that aren’t legal in the United States. Mr. Zhao has long been ranked as the world’s richest crypto billionaire, with a net worth of $17.4 billion, according to Forbes.

But Binance, which also runs a smaller U.S. operation, has faced regulatory scrutiny from the Securities and Exchange Commission, and many details of its business are cloaked in secrecy. While its exact valuation is not precisely known, Binance processes as much as $76 billion a day in crypto trades, according to CoinMarketCap, the industry data tracker.

A few days ago, Mr. Bankman-Fried posted a since-deleted tweet joking that Mr. Zhao might not be allowed to visit Washington, an apparent allusion to the regulatory scrutiny. Now Mr. Zhao is poised to take over his company.

In his note to FTX staff on Tuesday, Mr. Bankman-Fried promised more information about the deal soon. “Let’s live to fight another day,” he said.


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